So... I'm trying to figure out a reason to have a hotel.
Even with a hotel setup, tourists stil l wander stupidly around my island... and it seems that the Hotel is a huge target for agents to just come and blow shit up.
Is there a good reason to keep a hotel around?
Does it earn you cash at all?

It definitely doesn't seem to do anything positive. Although, there is the minor benefit of a sort of crowd control. If you make sure every entrance has a door on it, you'll get an annoying message that someone has breached a security door. However, once they're in the door commonly closes behind them and they're stuck until they break back out. I sort of use it as a snooper corral. And it's not even great at that.
The one thing I will say is that there seems to be a time limit for any squad of agents until they get frustrated and leave. If you trap them in the hotel for awhile (or more accurately if you let them trap themselves), you are less likely to have to kill them, thus keeping your freezer pretty clean. As you may have found out, it's easy to get caught up in a kill spiral where you keep killing interlopers and cramming them into your freezer, thus raising your heat and causing more squads to come knocking at your door etc etc.
I haven't been playing long, but the more I play the more I appreciate the benefits of things like social minion distraction and traps like the wind trap which doesn't kill but ejects the agents until they get frustrated and quit.

i think hotels are working better if you have more than one.

I've also noticed that Spindoctors seem to service hotels much better than valets.

The thing is that hotels are supposed to keep tourists away right...
But I never see tourists in the hotel... they're always running around the island like idiots!
Am I missing something.
I actually just built a second hotel and moved over everything from the first (or tried to... I couldn't get 3 of the rooms to move for some reason... can't even demolish them.. they just won't go away). Turned the first one into a trap center for stupid agents.

I'm hardly a top player, but some thoughts :
A) As someone already said, you need two hotels to see some result. Put them at opposite ends of the island. This way, tourists will waste all their time walking from one hotel to the other.
B) if you're using the unofficial patch, you can build all kinds of rooms in the hotels. It means you can fill a hotel wing with the 5 basic (no heat) resplenishing rooms : a small library, a mess hall with a simple counter, an infirmary with a booth, a barrack with a few beds, a small staff room. This way, your minions won't have to walk across the whole map to resplenish their stats when they have to. As a consequence, it makes the building of a single entrance base easier.
C) they are great places to put pop-up traps -- the ones that reduce smarts. They bring no heat and, since the hotels are rather small, your valets will spend less time accompanying the agents. For the same reason, to spare valet's time, you need a small archive near such traps.
D) Hotels also have a role-play value. Any spy worthy of that title must evolve in a luxury setting, sipping champagne and carelessly playing huge amounts of money at the baccarat table.

One last but important thing : don't forget to unlock your hotels' doors so the tourists can pass ! Right click on the door, then the "one dot" command.

That's definitely good info PH... thanks a lot.
Should I bother creating a 2nd hotel on the 1st island.
Is there any amount of time on the 2nd island where agents don't show up to your base b/c they don't know where it is?

Here again, I've not finished the game yet. Others probably know better.
A lone hotel is nearly worthless, so it's better to build two -- three would be too much, since you won't have enough men to crew them. The best moment to do that on the first island is early on, just before you interrogate the maid. Once the control room is operative, you can send minions stealing on the world map, but nobody will attack you until the maid is interrogated. It means you can rack the cash and build everything you want. It feels like cheating, but the game is rather challenging, so...
The relief time between island 1 and island 2 is rather short. So you'll need plenty of cash to build all the important rooms before people start knocking at your door. Just before you leave the first island, don't forget to sell your stuff -- only minions, loot and cash are transfered. Everything else is lost.
Another thing : complete all missions on island 1 before you move. You can't assemble the totem on island 2. Plus, if you didn't gather all the devices, your research will be impaired.
Reportedly, it isn't a good idea to increase your notoriety above the necessary 200 on the first island. Mariana Mamba and Bruce Lee (i mean jet chan) are plenty enough to spoil your housewarming. You don't need more guests.

Oops... hahaha.
I'm still on the first island and I'm over 300 notoriety! XD
Haven't had too much of a problem with the super agents yet though. There's 4 or so coming to my island, but they usually get captured pretty quick... then 1 interrogation and they leave.
Haven't built a second hotel yet, so I guess I won't bother at this point.
Sell my stuff?
You mean demolish it? Does that actually give you cash back?
I think I'm almost done with the first island... I've finished all objectives and I'm at the point where I have to earn 10000 every minute for 5 minutes. I did the "pre-maid" trick already and had 3.2 million to mess with, so I haven't really had much of a reason to get tons of cash up to now.

demolish will give you money back, but you can only take 800.000 to second island as far as I know
(the temporary strongroom can't hold more)

Ahhh... that's good to know.
Thanks for the info.

That's how much you start with, although as soon as you build a full treasure room/strong room and move the briefcase object to the new room, then shut down the old one (Say yes to the prompt), you'll get all your money back beyond the 800k you had before you left. Recommend having at least 2 mil before switching islands, and research/collect all you can before you switch.
As far as the hotel goes, you only need one, and a LOT of social minions. The best thing you can do is put a time clock in the lobby, casino (Once you can build it), and bar to make sure there are always some there. No social minions working, no tourists will go to the hotel. I always keep a ton of social minions around anyways, it's much more effective (and less heat) to "attack" agents with social minions.
As PM mentioned, you'll also want to make sure the doors you build have a security setting of one, otherwise the tourists can't get in.
EG is one of my fav games to date, glad to see it still has some life through gog.com :)
[edited for clarification and typos]

maybe there is some timeframe to build the new strongroom then. As I didn't get the money back, but i build the strong room pretty late.

From my experience, hotels seem to be a waste. I built a couple on the first island and the number of tourists seemed to increase after each new hub or wing.
Sure, they'd almost all disappear into the rooms at night, but as soon as the sun came out, so would a huge mass of tourists--an annoying percentage would ignore the hotel distractions, wander around the island, and end up getting themselves trapped in areas they should be.
I've had better results with topside shacks.
I've dotted both islands with them along the edges. Each shack is set up as a barrack and holds an equipment rack (once researched) and a locker (so plus 5 minions). Put a door on it with security setting of three dots (genius and henchmen only) and it becomes an agent magnet. Since the only thing in them are zero-heat items, once agents eventually break in, all they get is disappointment.
I've had a number of agents spend their entire time bouncing from one shack to another--never coming close to my actual base.
This also means the social minions spend most of their time in the base--exposed to loyalty-increasing loot. If you follow the building plan of having a security system and a zero-heat "outer" base, then you just need to tag agents and tourists that manage to get in for psychological weakening--with plenty of social minions on hand to intercept them before anyone gets close to the real base.